It’s not every day that investors find outstanding growth stocks before they blow up. During the summer, I wrote about three hidden gem growth stocks that have since seen market beating returns. The investment thesis for all three companies still holds, regardless of the gains these stocks have seen in the past half year.
In this article, I will recap three picks I made during the summer, how they’ve done since, and why you should add them to your portfolio today.
Where do you turn to for help in a pandemic?
During the start of the COVID-19 pandemic, companies in all sectors were feeling the pain. Regardless of what business line they were in, companies were hurting for cash. This was especially true for banks. As a result, they were more hesitant than ever to lend money to the everyday person (after interest rates fell, that became another story). Because of this, I suggested investors should look into goeasy (TSX:GSY).
Goeasy is an alternative financial company that provides non-prime leasing and lending services. Through its two divisions, easyfinancial and easyhome, consumers can get access to affordable loans or rent-to-own durables. Still a smaller company, goeasy has been growing its revenue at a compound annual growth rate of nearly 13% since 2001. The company is also a bona fide Dividend Aristocrat. The stock is up about 140% since my first article, and I’m confident it will see much higher levels from here.
Everything lined up for this company
When Score Media and Gaming (TSXV:SCR) first announced the launch of its theScore Bet app, much of the financial world seemed to have missed the memo. Although sportsbooks are quite large in Europe, it is still only a small market on this side of the pond. However, it is a trend that is increasingly gaining momentum in North America.
What’s unfortunate for Score Media is that it released the app in late 2019. By early 2020, all major sports leagues had shut down for the season, swiftly cutting off any excitement for the company’s latest offering. By mid-June, some leagues had announced that they were beginning to turn the wheels in hopes of resuming competitive action.
It was at that time that I suggested investors take a look at the company. Since then, the stock has grown as much as 600%! It’s still early days, but Score Media looks like a monster in the making.
Taking advantage of the digitization wave
I often write about the need for companies to adapt their businesses to an ever-digital world. I believe companies that offer solutions to this issue will continue to see major growth over the next few years. Because of this, I suggested that investors take a look at Tecsys (TSX:TCS) back in June. The company is at the forefront of the supply chain industry, offering companies a suite of solutions to optimize their operations.
Not a particularly new company, Tecsys was founded in the 1980’s. However, it seemed like the right time to invest in the company considering it had entered new industries that were proving to be excellent decisions. The company also features a management team with a lot of skin in the game, which is something that I look for in all the companies I add to my portfolio.
Since my first article covering the stock, it has gained as much as 185%. Still under a $1 billion market cap, the stock should see massive growth from this point.
Don’t be discouraged if you think you missed out on some of the big growth stocks over the past year. There are still so many opportunities in the stock market. These three stocks have all seen tremendous gains over the past year, but they are still relatively small and hidden compared to other Canadian growth stocks. All three companies have bright futures ahead and should continue to see massive growth in the future.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Jed Lloren has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tecsys Inc.